Overview and Progress on Financial Inclusion

Financial Inclusion is an important priority of the Government. The objective of Financial

Inclusion is to extend financial services to the large hitherto un-served population of the country to
unlock its growth potential. In addition, it strives towards a more inclusive growth by making
financing available to the poor in particular.

2.

Position of households availing banking services:

As per Census 2001

As per Census 2011

Number
of
Total number households
of households availing
Percent
banking
services

Number
of
households
availing
Number
banking
services

Percent

Rural

138,271,559

41,639,949

30.1

167,826,730

91,369,805

54.4

Urban

53,692,376

26,590,693

49.5

78,865,937

53,444,983

67.8

Total

191,963,935

68,230,642

35.5

246,692,667

144,814,788

58.7

Households

3.

Bank Branches and ATMs :

(i) Expansion of Bank Branch network: The number of branches opened by Public
Sector Banks (PSBs) and Scheduled Commercial Banks (SCBs) during last five years :
Number of functioning branches of Public Sector Banks - Population Group wise:

Rural

Semi Urban

Urban

Metropolitan

Total

31.03.2011

20658

16217

13450

12612

62937

31.03.2012

22379

17905

14322

13244

67850

31.03.2013

24243

19642

15055

13797

72737

31.03.2014

27547

21952

16319

14644

80462

31.03.2015

29634

23549

17387

15325

85895

As on

Population Group wise number of branches of Scheduled Commercial Banks (SCBs):

Rural

Semi Urban

Urban

Metropolitan

Total

31.03.2011

33923

23089

17629

16255

90896

31.03.2012

36546

25834

18879

17274

98533

31.03.2013

39816

28546

19935

18092

106389

31.03.2014

45293

31530

21532

19275

117630

31.03.2015

48557

33766

23036

20498

125857

As on

Bank Group and Population Group wise Number of Functioning Branches as on March 31,
2015:
Bank Group

Rural

Semi Urban

Urban

Metropolitan

Total

SBI & its Associates

8029

6593

4304

3622

22548

Nationalised Banks

21228

16428

12604

11325

61585

377

528

479

378

1762

4302

6457

4521

4698

19978

12

57

247

324

Regional Rural Banks

14613

3748

1071

228

19660

Grand Total

48557

33766

23036

20498

125857

Other Public Sector Banks

Private Sector Banks
Foreign Banks

(ii) Position of ATMs deployed by PSBs and SCBs during the last five years:
Number of ATMs of Public Sector Banks (PSBs):
As on
Off-site ATMs
On-site ATMs
31.03.2011*
20032
30201
31.03.2012
24181
34012
31.03.2013
29411
40241
31.03.2014
44504
65920
31.03.2015
58763
69902
30.06.2015**
59245
71979
*The data pertains to ATMs deployed as on April 30, 2011

Total ATMs
50233
58193
69652
110424
128665
131224

** Data for June 2015 is provisional

Number of ATMs of Scheduled Commercial Banks (SCBs):
As on
31.03.2011*
31.03.2012

Off-site ATMs
34377
48141

On-site ATMs
41268
47545

Total ATMs
75645
95686

31.03.2013
58254
55760
31.03.2014
76676
83379
31.03.2015
92191
89061
30.06.2015**
92735
91486
*The data pertains to ATMs deployed as on April 30, 2011

114014
160055
181252
184221

** Data for June 2015 is provisional

(4) RBI Branch Authorization Policy:

In order to extend the banking network

in unbanked areas, general permission has been granted by Reserve Bank of

India (RBI) to domestic Scheduled Commercial Banks (other than Regional Rural
Banks) to open branches/ mobile branches/ Administrative Offices/CPCs (Service
Branches), (i) in Tier 2 to Tier 6 centres (with population upto 99,999) and (ii) in rural,
semi-urban and urban centres of the North-Eastern States and Sikkim subject to
reporting. RBI has advised banks that while preparing their Annual Branch
Expansion Plan (ABEP), the banks should allocate at least 25 percent of the
total number of branches proposed to be opened during a year in unbanked
rural (Tier 5 and Tier 6) centres.

(5)

Expansion of BCA Network : Banks have been advised by DFS to extend

banking services to the entire geography of the country based on the concept of Sub
Service Area (SSA) comprising of 1000-1500 households. In case of North-East, Hilly
States

and sparsely populated regions of other States banks may decide the

households to be covered by each Business Correspondent Agent (BCA)

appropriately. In case of larger Gram Panchayats more than one BCA could be
appointed. In case of smaller Gram Panchayats more than one contiguous Gram
Panchayat, taking into consideration the geographical area, could be assigned to
each BCA.
(6) Swabhimaan Scheme: Earlier, under the Swabhimaan campaign, the Banks
were advised to provide appropriate banking facilities to habitations having a
population in excess of 2000 (as per 2001 census) by March 2012. The banks
identified approximately 74000 habitations across the country having a population
of over 2000 for providing banking facilities.

As per reports received from

Banks, 74351 villages with population of above 2000 have been covered with
banking facilities either by branches; Business Correspondents, mobile banking etc.
by March 31, 2012.

(7) Direct Benefit Transfer (DBT) and Direct Benefit Transfer for LPG (DBTL):
The objective of DBT Scheme is to ensure that money under various developmental
schemes reaches beneficiaries directly and without any delay. Banks play a key role in
implementation of DBT/DBTL and this involves four important steps, viz.
(i)

Opening of accounts of all beneficiaries;

(ii)

Seeding of bank

accounts with Aadhaar

numbers

and

uploading

on the NPCI mapper;

(iii)

Undertaking funds transfer using the National Automated Clearing House Aadhaar Payment Bridge System (NACH-APBS).

(iv)

Strengthening of banking infrastructure to enable beneficiary to withdraw

money.

(8) (i) Direct Benefit Transfer (DBT): The scheme was launched in the country from
January, 2013 and was rolled out in a phased manner, starting with 25 welfare
schemes, in 43 districts and extended to additional 78 districts and additional 3
schemes from 1st July, 2013. Presently DBT in 35 schemes have been expanded
across the entire country.
(8)(ii) Direct Benefit Transfer for LPG (DBTL) : The Direct Benefit Transfer for LPG
(DBTL) scheme was rolled out in 291 districts in the country from 1 st June 2013 in six
phases. While preliminary results indicated that the scheme met its primary objectives
of curbing leakages in the distribution system, the speed at which it was rolled out and
inclusion of low Aadhaar districts gave rise to consumer grievances. The Government
of India took cognisance of the grievances and directed that the scheme be held in
abeyance and constituted a Committee on 7th March, 2014 under the chairmanship of
Dr. S.G. Dhande, Former Director, IIT, Kanpur to review the scheme and submit its
report to the Government of India after consultation with the stakeholders.
The Committee examined the functioning of the DBTL scheme in depth by meeting all
stakeholders and after a detailed study of the scheme design, architecture and
implementation structure, audit reports, consumer feedback and interactions with the
stakeholders strongly recommended that DBTL scheme should be recommenced as it
is a very efficient way to disburse subsidies. The Committee recognizes that although
the scheme design is indeed very robust and scalable which prevent leakages, it has

suggested several systemic changes and enhancements to mitigate the hardships

reported by the LPG consumers.
Union Cabinet in its meeting held on 18.10.2014 decided to re-launch of Modified
Direct Benefit Transfer for LPG Consumers (DBTL) PAHAL Scheme from 15.11.2014
in 54 districts and in the entire country from 1.1.2015.
(9) RuPay Card: RuPay, a new card payment scheme has been conceived by
NPCI to offer a domestic, open-loop, multilateral card payment system which will
allow all Indian banks and financial Institutions in India to participate in electronic
payments. The card has been dedicated to the nation by the President of India on
May 08, 2014.

RuPay symbolizes the capabilities of banking industry in India to

build a card payment network at much lower and affordable costs to the Indian banks
so that dependency on international card scheme is minimized.

This is in line with

many of the large emerging nations like China which have their own domestic card
payment system. Government of India has directed banks to issue Debit cards to all
KCC and DBT beneficiaries and that every new account holder should be issued a
debit card. A low cost option such as RuPay will help in achieving this objective and
consequently help in fulfilling the objective of financial inclusion. The RuPay Card
works on ATM, Point of Sale terminals, & online purchases and is therefore not only
at par with any other card scheme in the world but also provides the customers with
the flexibility of payment options.
(10) USSD Based Mobile Banking : The Department through National Payments
Corporation of India (NPCI) worked upon a Common USSD Platform for all

Banks

and Telcos who wish to offer the facility of Mobile Banking using Unstructured
Supplementary Service Data (USSD) based Mobile Banking. The Department helped
NPCI to get a common USSD Code *99# for all Telcos.

USSD based Mobile

Banking offers basic Banking facilities like Money Transfer,

Bill Payments, Balance

Enquiries, Merchant payments etc. on a simple GSM (Global System for Mobile
Communications) based Mobile phone, without

the need to download application

on a Phone as required at present in the IMPS (Immediate Payment Service) based

Mobile Banking.
Transactions can be performed on basic phone handsets.

The user needs to

approach his bank and get his mobile number registered. The bank will issue
5

an MPIN (Mobile

PIN) to the user. The user thereafter needs to dial

and the menu for using

USSD opens.

*99#

Thereafter customer has to follow

selections on the menu to complete the transaction.

(11) Pradhan Mantri Jan-Dhan Yojana (PMJDY)
Pradhan Mantri Jan-Dhan Yojana (PMJDY) was formally launched on 28th August,
2014. The Yojana envisages universal access to banking facilities with at least
one basic banking account for every household, financial literacy, access to
credit, insurance and pension. The beneficiaries would get a RuPay Debit Card
having inbuilt accident insurance cover of Rs.1.00 lakh.

In addition there is a

life insurance cover of Rs.30000/- to those people who opened their bank
accounts for the first time between 15.08.2014 to 26.01.2015 and meet other
eligibility conditions of the Yojana.
PMJDY is different from the earlier financial inclusion programme (Swabhimaan) as
it, inter-alia, seeks to provide universal access to banking services across the
country and focuses on coverage of all households (both rural and urban) while
the earlier Financial Inclusion Programme was limited to provide access point to
villages with

population greater

than

2000.

Further,

PMJDY

focuses

on

interoperability of accounts which was not there earlier; has simplified KYC
guidelines and involves the Districts and States for monitoring and follow-up.
It has been clarified that existing account-holders

need not

open a new

account to avail the benefits under PMJDY. They can get the benefit of accident
insurance by getting a RuPay debit card issued and Overdraft limit by applying in
the

existing

account.

Further,

it has also

been

clarified

that

benefits

of

Rs.30,000/- life insurance cover are available only to those whose accounts are
opened for the first time between 15.08.2014 to 26.01.2015.
Under PMJDY, banks were given target to carry out surveys in allocated Sub
Service Areas (SSAs) and Wards
households by 26.01.2015.

and to open accounts of

all uncovered

All the States/Union Territories in the country have

been mapped into 2,26,197 Sub-Service Areas (in rural areas) and Wards (in
urban areas) and out of total number of 21.22 crore surveyed households, bank
accounts have been opened for 99.99 % households.

PMJDY has been implemented by banks successfully. As against the estimated

target of opening 10 crore accounts, as on 28.10.2015, 19.02 crore accounts
have been opened out of which 11.58 crore accounts are in rural areas and
7.44 crore in urban areas. Deposits of Rs. 25913.55 crore have been mobilized.
16.37 crore RuPay Debit cards have been issued and Aadhaar seeding has been
done in 8.00 crore accounts.
Overdraft (OD) in PMJDY accounts: As on 30.10.2015, 22.43 lac accounts have
been sanctioned OD facility of which 8.37 lac account-holders have availed this
facility involving an amount of Rs. 11,824.97 lakh.
Insurance Claims settled:
(a) As on 30.10.2015, out of 669 claims lodged, 607 have been disposed off under
accidental insurance cover of Rs. 1 lakh under RuPay debit card .
(b) As on 30.10.2015, out of 1516 claim lodged, 1450 claims have been disposed off
under Life Cover of Rs.30,000/- to those beneficiaries who opened their accounts for
the first time from 15.08.2014 to 26.01.2015.
*********